US Economy

The economy got 3 more years of life from Trump tax cuts: Wall Street veteran Howard Lutnick

Key Points
  • The economic "pop" from President Donald Trump's corporate tax cuts should head off any recession in the next few years, says Howard Lutnick.
  • He believes the Trump administration's target of 3 percent economic growth is "absolutely in the cards as a reasonable outcome."
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People do not understand how strong the tax cut is for America: Howard Lutnick

The economic "pop" from President Donald Trump's corporate tax cuts should head off any recession in the next few years, Howard Lutnick, chairman and CEO of BGC Partners, told CNBC on Wednesday.

In fact, he believes the Trump administration's target of 3 percent economic growth is "absolutely in the cards as a reasonable outcome."

With the corporate tax rate now at 21 percent, down from 35 percent, companies will earn more money and invest in plants and equipment, said Lutnick, also chairman and CEO of financial services firm Cantor Fitzgerald.

"That tax cut, people do not understand how strong that is for corporate America. And that creates jobs, creates growth," he told Bob Pisani on "Power Lunch."

On top of that, the government is cutting regulation and letting banks do more business, he added.

"What could have been the end of the [economic] cycle was given three more years because he just hit it with an adrenaline pop."

Lutnick is also supportive of Trump's trade policies. The administration has slapped tariffs most recently on Canada, Mexico and the European Union, angering allies. The move has prompted targeted countries to retaliate.

On Wednesday, top White House economic advisor Larry Kudlow said not to blame Trump for the troubles.

Instead, "blame the nations that have broken away" from fair trade practices, he told reporters. The global trade system "is broken and President Trump is trying to fix it. And that's the key point," Kudlow added.

Lutnick agrees that past trade practices weren't working. Meanwhile, the global economy is growing.

"If you were going to try to make changes and you were going to try to level the playing field on trade, wouldn't you pick the time when the global economy is growing?" he said. "If you're going to do it, now's the time."